If the long-term problems of the U.S. economy--our trade and budget deficits, lagging productivity, low rates of saving and investment--could somehow vote their own abolition, they would vote for Bruce Babbitt; the former governor of Arizona is the only presidential candidate in either party who is courageous enough to propound real solutions to those problems. Yet Babbitt is barely a blip in the polls, and, while the other Democratic candidates have been raising healthy sums, he has just been forced to take out a big loan to keep his campaign alive.
If a lack of money forces Babbitt to drop out of the race before any ballots have been cast, it will demonstrate the truth of the late Teddy White's verdict that "television is American politics." As well, it will show that the Democratic Party remains in thrall to policies that the country can no longer afford and to the interest groups that tenaciously defend them.
Babbitt ran afoul of White's axiom during the first debate among the Democratic candidates, held in Houston in July. He spoke in a throaty whisper that made him sound like a kind of Claude Rains of the Pecos, and he looked awful. Writhing in his chair, bobbing his head vehemently to emphasize his points, Babbitt brought to charitable minds the image of Ichabod Crane with a case of the DTs. Uncharitable minds wrote him off then and there. Babbitt has since done better on television, but the Houston debacle came at a critical time, and it left him in a position in which, to quote from a recent study of Democratic fund-raising, "without a new infusion of capital, probably from Arizona, it is difficult to foresee success in this campaign."
Babbitt is also in trouble because of his ideas, which hang together in a coherent philosophy that he calls "radical centrism." According to David Osborne, who has written a soon-to-be-published book about the Democratic governors, "The thesis of radical centrism is that voters no longer want traditional liberal or conservative ideology, but they do want radical action that will cut to the heart of the nation's problems." Whether this is what the voters really want may be doubted, but Babbitt's commitment to "radical action" is clear.
Proceeding on the incontestable assumptions that (1) we can't have steady economic growth without bringing the deficit under control and (2) the deficit cannot be cut without a reform in the so-called entitlement programs that make up half of the federal budget, Babbitt advocates that a "universal needs test" be applied to federal programs ranging from farm aid to Social Security. He would reverse the trend that has seen federal outlays for social programs climb from $36 billion in 1965 to $307 billion in 1980 to $459 billion in 1985. He would also re-target some of this spending so that more of it goes to the people who need it.Of that $459 billion in 1985, only $100 billion went to the poor; the remaining $360 billion went to the prime beneficiaries of America's welfare state, the middle class, in the shape of Social Security, Medicare and federal pensions. To reduce the cost of these programs, Babbitt would, for example, tax the income of the 10% of Social Security recipients who earn more than $30,000 per year the same way that the income of non-retirees is taxed--on every dollar earned, rather than, as now, at the rate of 50 cents on the dollar. Using his means test, he would also attack the scandal of farm subsidies, two-thirds of which, according to a recent report by the Government Accounting Office, go to farmers who are well-off.
As if these proposals were not radical enough, Babbitt has come out for a 5% "progressive national sales tax" that would exempt food, medicine and housing but would raise sufficient revenue from other sources (furniture, VCRs, etc.) to yield $40 billion to $60 billion per year. That would not only help to cut the deficit; it would also encourage Americans to spend less and to save more, which would make more capital available for investment--the engine of economic growth.
Babbitt also favors a rewriting of the rules of international trade in such a way that trade imbalances like that between Japan and the United States would be unlikely to happen again, he is for a voucher system that would provide quality day care and pre-schooling to families that cannot afford them, and he thinks that productivity could be improved by greater "workplace democracy," which he would promote with the carrot of government purchasing power.
Babbitt's proposals--and I have mentioned only some of them--add up to the most imaginative program for reform since that of the New Deal. Franklin D. Roosevelt, however, did not run on the New Deal programs in 1932; he improvised them after he was elected. Babbitt tells you up front that he means business. That is why he remains a long, long shot for the nomination.